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DIRECTIVE No. 08/2003/CT-TTg OF APRIL 4, 2003 ON ENHANCING THE EFFICIENCY AND COMPETITIVENESS OF ENTERPRISES

Over the past years, the Party and the State have adopted numerous guidelines and policies, aiming to create a favorable environment for enterprises to raise their production and business efficiency as well as their competitiveness on the market. Enterprises have also made great efforts to grow, thus making decisive contributions to the process of economic restructuring and maintaining the high economic growth rates in recent years. Yet, the production and business efficiency and competitiveness of enterprises as well as our country's economy still remain limited, failing to meet the market demands and the requirements of integration into the regional as well as world economy.

This situation is attributed to many reasons, but mainly to the facts that the economic institution remains asynchronous and inconsistent; the implementation organization still sees many shortcommings, administrative procedures remain complicated and cumbersome, not a few State agencies and employees fail to well fulfill their responsibilities, thus causing difficulties and obstacles to enterprises; many fees and charges are still high; many enterprises have failed to take initiative in renewing technologies and raise their managerial levels and their workers' professional skills; their production costs remain high, the enterprise management has not yet been made transparent, the joint-venture and association among enterprises remain weak, and the enterprises lack initiative in international economic integration and still expect and rely passively on the State's privileges and protection. The role of enterprises' associations and goods line associations is still restricted.

In order to remedy the above-said weaknesses, create vigorous changes in raising the enterprises' efficiency and competitiveness, turn out many more products and services of high quality and at competitive prices, which can satisfy the production and daily life requirements, and take initiative in efficiently integrating into the international as well as regional economy, the Prime Minister hereby instructs:

1. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People's Committees of all levels shall, according to their respective assigned responsibilities, immediately perform the following tasks:

a/ Well organizing the implementation of the Government's Resolution No. 02/2003/NQ-CP of January 17, 2003 on a number of major guidelines and policies to implement the National Assembly's Resolution on the 2003 socio-economic development tasks and the Government's 2003 working program; and at the same time, reviewing all documents and regulations concerning activities of enterprises in order to readjust and supplement in time necessary contents, with a view to removing difficulties, solving problems, boosting the production and business development, raising the competitiveness of products, enterprises and the entire economy.

b/ On the basis of selecting products with advantages, outlets and high competitiveness, readjusting and supplementing development strategies and plannings of branches, territorial areas and localities; adopting appropriate mechanisms and policies to create conditions for enterprises of all economic sectors to readjust their investment structure and production-business structure; encouraging the rapid development of enterprises with distributing functions strong enough to link production with circulation and effectively help producers sell their products; and at the same time, creating conditions for the emergence of new enterprises, especially small- and medium-sized ones.

c/ Encouraging and creating conditions for enterprises, cooperatives, production-business households and individual business households to continue promoting the production of products with outlets, advantages in traditional techniques and skills, high quality and low costs; renewing technologies and efficiently applying scientific and technological advances to production, business administration, product quality control and environmental management according to international standards. Continuing to support enterprises in training, raising their managerial and executive capabilities and the professional skills of their workers, thus creating a breakthrough in raising productivity, product quality, production efficiency and product competitiveness, actively working out the tariff reduction schedule, and taking initiative in participating in the regional and international economic integration.

d/ Stepping up the reorganization, renovation, development and raising of efficiency of State enterprises; approving and expeditiously organizing the implementation of the overall plan for reorganization and renovation of State enterprises; concentrating on strengthening and raising the operation efficiency of corporations, accelerating the equitization of State enterprises according to the already approved equitization plans.

Resolutely carrying out the law-prescribed merger, dissolution and bankruptcy of enterprises doing business with chronic losses; stepping up the settlement of outstanding debts and redundant laborers with a view to making their finance healthy and transparent, and creating favorable conditions for the transformation of State enterprises' ownership. For enterprises fully eligible for being maintained as enterprises where the State holds 100% of their capital, efforts must be concentrated on strengthening the management organization and promoting the development investment under the approved strategies, planning and plans; amending and supplementing the mechanisms, policies and models of management organization so as to enhance the autonomy, activity, efficiency and self-responsibility of State enterprises under the market mechanism.

e/ Continuing to step up the implementation of the Enterprise Law. Consistently implementing the policy to secure the enterprises' right to freely deal in the business lines and trades not banned by law; promulgating specific regulations on conditional business lines and trades, especially those sensitive in the cultural, social or people's health domain. Strengthening the working team for enforcement of the Enterprise Law, so that it can monitor the observance of the mechanisms, policies and legislation related to enterprises; summing up the situation and periodically reporting to and proposing the Prime Minister to amend and supplement necessary mechanisms and policies.

f/ Taking specific measures to create conditions for rapid development of such services as: consultancy on project formulation and evaluation, debt purchase and/or sale, financial leasing, enterprise administration, human resource training, application of sciences and technologies, information, marketing, industrial property protection, trademark building, etc.

g/ Continuing the administrative reforms along the direction of having a single contact body or organization to perform one type of work; clearly prescribing the rights and responsibilities of organizations and individuals; strictly handling officials, public servants and employees who cause troubles to enterprises or violate the provisions of law while on public duty.

h/ Periodically organizing meetings with enterprises for direct and open dialogues, promptly settling problems and complaints of enterprises. Intensifying the working coordination with associations and organizing, together with associations, frank dialogues on matters related to production and business; rectifying the work of inspection and examination of enterprises in strict compliance with the current provisions of law, ensuring the State's tight management, without obstructing normal operation of enterprises.

i/ Organizing wide consultations with enterprises and associations and seriously assimilating their contributed reasonable opinions in the course of studying and promulgating regulations related to the business environment, rights and obligations of enterprises.

2. The Ministry of Finance has the following tasks:

a/ In the third quarter of 2003, to submit to the Government for promulgation the mechanism for use of proceeds from the transfer of the right to use land previously assigned to enterprises according to the provisions of the land legislation, which must now be relocated under the planning for construction investment and technological renewal according to the approved projects.

b/ To coordinate with the ministries, localities and State enterprises in stepping up the settlement of outstanding debts, making the enterprises' finance healthy and transparent, using in time and for right purposes the Assistance Fund for Redundant Laborers; to guide the prompt solution of problems arising in the valuation of State enterprises, sale of equities to investors outside enterprises through auctions, in order to accelerate the ownership transformation.

c/ To study and submit to the Prime Minister for promulgation the Regulation on mutual insurance organizations, thus creating favorable conditions for the private economic sector to establish mutual insurance organizations to share risks and assist one another in business activities.

d/ To conduct the review of one year's implementation of the Customs Law; to amend or submit to the competent agencies for amendment, supplement or formalization the regulations on customs professional operations to replace the provisional regulations; to continue improving the customs procedures and add more export goods items exempt from the customs inspection, with a view to reducing by the end of 2003 the customs clearance duration as well as expenses to be equal to those of regional countries.

e/ To study and submit to the Government for prescription the relationship between the State and enterprises doing business in the fields monopolized by the State along the direction that: business monopoly constitutes a national resource, and therefore, when permitting enterprises to exercise it, the State shall collect an adequate part from such resource, except when such right is used in service of security or national defense.

f/ To coordinate with the Ministry of Communications and Transport, the Ministry of Industry and localities in directing the revision of assorted charges; to reduce the seaport and airport charges, etc., to make them equal to those of regional countries by the end of 2004.

g/ To assume the prime responsibility and coordinate with the Ministry of Planning and Investment, the Development Assistance Fund and the concerned agencies in studying and submitting to the Government for restricting subjects eligible for the preferences from the State's development credit; and to simplify the lending order and procedures. To attach importance to the form of post-investment interest rate support and investment credit guarantee; to create favorable conditions for enterprises of all economic sectors to have access to the State's credit in the fields where the State encourages the investment.

h/ To study and propose the reduction of value added tax and import tax rates; to abolish the regime of collection of price differences for input production raw materials which are not yet produced at home or cannot satisfy the quantitative and qualitative requirements; to readjust enterprise income tax along the direction of creating equality between domestic enterprises and foreign-invested enterprises; to improve and simplify the procedures for tax collection, reimbursement and customs inspection; to enhance and rectify the inspection after the professional tax and customs operations are carried out (post-inspection); to create favorable conditions for enterprises to implement the cost price reduction schedule and raise their competitiveness.

i/ To assume the prime responsibility and coordinate with the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Education and Training and other concerned agencies in studying and submitting to the Government for promulgation the mechanism and policy to support the training of managerial officials and the raising of professional skills of laborers at enterprises.

j/ To study and submit to the Government the mechanism for forming capital sources for techno-logical development, development and improvement of products to be applied directly to the industrial and agricultural production.

3. The Ministry of Trade has the following tasks:

a/ To coordinate with the ministries, localities, associations of enterprises, associations of business lines and trades and enterprises in taking initiative in organizing trade promotion at home and abroad, in order to expand goods consumption market. To improve the work of market information and situation forecast, so that enterprises can take more initiative in their production and business activities. To study the possibility of opening a number of trade promotion centers in such major markets as the US, Japan, Europe, etc. To step up the work of market management, trade fraud combat, fight against fake goods production and trading; to stringently handle acts of speculating or stockpiling goods, raising prices for illicit profits according to the provisions of law.

b/ To assume the prime responsibility and coordinate with the concerned ministries in realizing the guideline for diversifying export markets. To step up export into major markets such as the US, the EU, Japan, China and the ASEAN; to revive the traditional markets in parallel with the opening of new export markets (Middle East, Africa, Latin America). To coordinate with the other ministries and associations in struggling to tackle the non-tariff barriers, technical obstacles and settle trade disputes over Vietnam's exports.

c/ To coordinate with the Ministry of Finance and the concerned agencies in organizing the prompt application of measures to boost the export under the Prime Minister's direction in the Government's Document No. 78/CP-KTTH of January 20, 2003; and at the same time, to study and submit to the Government the input cost support mechanism in replacement of the direct output support mechanism.

d/ To assume the prime responsibility and coordinate with the concerned ministries and agencies in expeditiously studying and drafting the E-Commerce Ordinance, then submitting it to the Government for examination and comments.

4. The Ministry of Planning and Investment has the following tasks:

a/ In April 2003, to submit to the Prime Minister the scheme on consolidation of the working team for enforcement of the Enterprise Law.

b/ To continue studying, elaborating and finalizing the experimental scheme on attraction of foreign investors to invest and deal in real estate, development of high technologies as well as services with high added values such as finance, banking, air transport, maritime transport, legal consultancy and commerce. To study and report to the Government the policy and solutions to effect the form of investment, merger and acquisition (M&A).

c/ To guide the transformation of a number of foreign-invested enterprises to operate in form of joint-stock companies after the Government issues a decree on this matter; to guide the procedures for investment licensing registration with a view to easing the administrative procedures for foreign investors.

5. The State Bank of Vietnam shall direct the system of commercial banks to continue improving the order and procedures for mortgage and lending, thus creating favorable conditions for enterprises of all economic sectors to get access to capital sources for investment in production, technological renewal and human resource training; especially to boost the provision of medium- and long-term loans for projects, provided that borrowers and assets formed from borrowed capital satisfy the conditions under the current regulations.

6. The Ministry of Post and Telecommunications has the following tasks:

a/ To speed up the process of implementing the schedule of reducing the telecommunications charge rates to be equal to or lower than the average charge rates of regional countries; and at the same time, to coordinate with the Ministry of Finance in studying and submitting to the Prime Minister the mechanism for managing the postal and telecommunications charge rates along the direction of giving the autonomy to enterprises, combating the dumping of charges and the infringement of national interests.

b/ To assume the prime responsibility and coordinate with the concerned agencies in working out the program for application of information technology and the Internet to the advertisement for products and enterprises, attraction of customers and expansion of markets.

c/ To adopt specific policies and measures to support and encourage enterprises doing business in the field of post and telecommunications, especially fledgling enterprises on the market. To conduct the review of the granting of business licenses under the planning, thus ensuring the healthy development of the telecommunications market. In the second quarter of 2003, to complete the granting of business licenses to the enterprises already permitted by the Prime Minister to operate in this field. To plan the division of the telecommunications resource on the principle of equality, efficiency and rationality among the enterprises, thus raising service quality and ensuring the consumers' interests; to direct the supply of connection services in time, with the right capacity and quality to new enterprises, ensuring the fair competition among enterprises.

d/ To expeditiously compile and promulgate or submit to the competent State agencies for promulgation legal documents guiding the setting up and use of the Fund for universalization of post and telecommunications services. To coordinate with the Ministry of Finance in elaborating regulations on clear distinction between the post and telecommunications business and the public service in post and telecommunications activities.

7. The Ministry of Industry has the following tasks:

a/ In the second quarter of 2003, to submit to the Government the scheme for reduction of production costs and electric power loss rate.

b/ To continue finalizing the Government's draft decree on encouraging the industrial production in rural areas.

c/ To adopt plans and policies for development of the production of input raw materials and increased supply of complete equipment chains, spare parts and components for the manufacturing industries at reasonable prices and with high quality. To encourage the concentrated investment first of all in the three key economic regions in order to rapidly boost the manufacture of complete equipment chains, spare parts and components for turning out industrial products with competitive edges.

8. The Ministry of Agriculture and Rural Development and the Ministry of Aquatic Resources shall assume the prime responsibility and coordinate with the People's Committees of the provinces and centrally-run cities in concentrating their direction on organizing the implementation of the program on plant varieties and domestic animal breeds, thus ensuring the adequate supply of good high-yield and high-quality breeds and strains, capable of ensuring the stable supply at reasonable prices; to expeditiously guide the mechanism and policy to encourage all organizations and individuals to participate in the research, cross-breeding and production of breeds and varieties. And at the same time, to enhance the inspection, scrutiny, supervision and handling of violations in the use of chemicals, anti-biotic agents in cultivation and husbandry, in order to ensure that commodity products are up to the food hygiene and safety standards for consumption and export; to pay special attention to promoting the development of the industry of processing and preserving farm produce and foodstuffs.

9. The Ministry of Health is tasked to coordinate with the concerned agencies in expeditiously organizing the implementation of the strategy for development of the pharmaceutical industry, with special importance attached to the development of production of pharmaceutical materials, chemical-pharmaceutical raw materials as import substitutes; and at the same time, to improve the mechanism for State management over pharmacy and drug prices.

10. The Ministry of Construction has the following tasks:

a/ To work out and submit to the Government the scheme on renewal of organization and operation of the water supply sector; to study the transformation of public-utility water supply enterprises into business enterprises with a view to raising the operation efficiency of enterprises in this field.

b/ To coordinate with the Ministry of Communications and Transport in guiding the localities to work out specific plannings and mechanisms for urban management and mass transit development; to create all favorable conditions for cooperatives and individuals to invest in communications and transport, including the dealing in stations and storing yards according to plannings.

11. The Ministry of Science and Technology has the following tasks:

a/ To adopt the policy to encourage the application and development of high technologies, to renew and raise the technological levels in the production of export products, products with advantages in raw materials and products in implementation of the AFTA program. To continue developing and applying research results of the biological technology, information technology, automation technology and new materials technology. To formulate the mechanism to encourage the association and cooperation between research institutes and production establishments.

b/ To propagate and disseminate the legislation on industrial property to enterprises; to guide and improve the procedures so as to create favorable conditions for enterprises to register and protect trademarks of their goods and/or services.

12. The Ministry of the Interior has the following tasks:

a/ In the second quarter of 2003, to finalize the draft decree on organization and operation of associations, including associations of enterprises and associations of goods lines along the direction of clearly defining the functions and tasks of associations and the relationships between associations and State agencies. The associations shall operate on the principle of self-financing.

b/ To study and propose the Government to assign an agency to act as the sole body in charge of the uniform State management over food hygiene and safety of goods for domestic consumption and export.

13. The Ministry for Foreign Affairs has the following tasks:

a/ To direct the foreign-based Vietnamese representations to well implement the Government's Decree No. 08/ND-CP of February 10, 2003 on activities in service of the economic development tasks. To take initiative in supplying to enterprises and associations of enterprises with adequate and timely market information, laws and business practices of foreign countries and international organizations; to support enterprises in establishing relations and conducting activities of trade promotion, investment, tourism, labor, scientific, technological and training cooperation with foreign partners.

b/ To coordinate with the Ministry of Planning and Investment and Vietnam Chamber of Commerce and Industry in organizing delegations of businessmen accompanying the Party's and/or the State's high-ranking delegations going on overseas working missions to do market research and sign export, import or investment contracts .

c/ To coordinate with the Ministry of Public Security as well as the foreign embassies in Vietnam and direct the foreign-based Vietnamese representations in creating all favorable conditions for businessmen of all economic sectors to get visas and to carry out other procedures for their overseas working missions.

14. The People's Committees of all levels have the following tasks:

a/ To base themselves on the socio-economic development plannings already approved by competent authorities to work out and clearly publicize plannings on land use, urban development, development of industrial parks and raw-material regions, etc., to pay attention to sparing land funds for small industrial zones or clusters so as to create production and/or business grounds for craft villages, small- and medium-sized enterprises; and at the same time, to facilitate the relocation of polluting production establishments out of inner quarters of cities and provincial capitals or production establishments under the approved plannings. To publicly and widely announce the policies on ground clearance compensations before executing investment projects.

b/ To enhance the inspection and supervision of the use of land areas already allocated to organizations and individuals, including State enterprises; to resolutely handle and recover land areas used wastefully, left unused or used not for the prescribed purposes, so as to supplement the land funds for enterprises which need to lease and use land efficiently.

c/ To assign a local agency to act as a sole body in charge of monitoring and summing up the situation of enterprises, detecting and suggesting measures to promptly solve their difficulties and problems, thus creating favorable conditions for enterprises of all economic sectors to develop and for associations to efficiently operate.

d/ To promote the operation of the Credit Guarantees Fund for small- and medium-sized enterprises, with a portion of the budgetary capital earmarked for setting up this Fund under the Prime Minister's direction; to create favorable conditions for small- and medium-sized enterprises to get access to the credit capital sources.

15. Enterprises of all economic sectors, cooperatives, etc. (called enterprises for short) have the following tasks:

a/ To attach importance to the study and elaboration of strategies for their production and business development; on the basis of evaluation of their markets and competitive edges to clearly determine the structure of products, services, markets, business modes, application of scientific and technological advances; to reduce production costs, raise goods and service quality and build trademarks.

b/ To seriously observe the provisions of law, fulfill the obligation of tax payment to the State; to uphold cultured business styles, build up their tradition and prestige; to make the business finance truthful and transparent; to well perform the internal administration, with importance attached to the policies of training and preferential treatment of laborers for stable and sustainable development.

c/ To work out specific plans and measures for thrift practice and reduction of raw materials, materials and energy costs; to readjust and supplement the labor norms, ensure the increase of labor productivity and saving of labor costs; to reorganize production in order to reduce costs in each stage; to renovate the management organization, especially productivity and quality management.

d/ To step up joint-venture or association with one another for input and output; to research into and transfer technologies and conduct training activities; to contribute to the creation of capital and business networks, exchange of information, efficient use of business support services.

e/ To well carry out the sale of farm produce through contracts between enterprises and farmers, in order to link the production, processing and sale of products together, and ensure the stable raw materials sources for production and business.

16. Associations of enterprises and associations of goods lines should renew their operation modes, admit more and more members and expand international cooperation; continue raising their role of enterprise representatives, act as operation coordinators among enterprises, boost joint-venture and association for mutual benefits and support enterprises in the transfer of technological know-hows, management experiences, trade promotion and protection of legitimate interests of their members in trade disputes and settlement of economic relationship among their members.

17. Vietnam Chamber of Commerce and Industry and Vietnam Union of Cooperatives shall coordinate with the Government's agencies, associations of enterprises and associations of goods lines in conducting trade promotion, investment and promotion of building of harmonious labor relations at enterprises; coordinate with the associations of enterprises and associations of goods lines in representing and protecting the enterprises' interests and supporting their development; and gather enterprises' opinions on the formulation of the State's laws and socio-economic policies.

18. The mass media agencies shall intensify the work of propagating and disseminating the undertakings and policies of the Party and the State to enterprises and people; promptly commend and honor enterprises and entrepreneurs that conduct efficient and lawful business activities; disseminating good experiences of enterprises at home and abroad; promptly detect and combat negative phenomena and corruptive acts in the State apparatus, which cause difficulties and obstacles to enterprises' activities, as well as enterprises' law violations. And at the same time, the mass media agencies should publicize accurate and selected information in order to protect interests of the country and enterprises.

19. The Government Office shall sum up petitions and specific problems of enterprises and associations raised before and during the 2003 Meeting between the Prime Minister and enterprises, classify them by issue and by agency, then forward them to the concerned ministries and agencies for settlement and reply as soon as possible to enterprises and associations, and report the settlement results to the Prime Minister.

20. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People's Committees of the provinces and centrally-run cities, the chairmen of the Managing Boards, the general directors or directors of the enterprises, and the heads of the concerned units and organizations shall have to implement this Directive.

21. The Ministry of Planning and Investment shall assume the prime responsibility and coordinate with the Steering Board for Enterprise Renewal and Development and Vietnam Chamber of Commerce and Industry in urging and monitoring the implementation of this Directive and quarterly reporting the implementation results to the Prime Minister.

Prime Minister
PHAN VAN KHAI